Pot stocks have taken a big hit across the board. Part of the problem that prices take a hit is that there’s too much cannabis being grown in places like Canada and Oregon. Wholesale prices have plunged from around $2,000 a pound to $600. But there isn’t an oversupply everywhere.
In the U.S., each state has completely unique laws. First of all, you can’t ship cannabis across state lines, even if it’s legal in the states you’re shipping to and from. Cross border transport would violate federal laws. This means that in the U.S., you can’t fix supply problems by importing or exporting the plant from state to state. Each state has to grow it all within its own borders.
Cannabis will continue its march to full legalization. Medical uses will continue expanding dramatically as we finally study this extremely valuable plant. Cannabis stocks will continue to be volatile. One big reason is because marijuana is an industry dominated by retail investors and not big institutional investors.
The marijuana market is a huge, fast-growing, disruptive force. And retail investors are driving the market, while most professional money is on the sidelines indefinitely. It’s going to be a wild ride for the next few years, but those who buy and hold high-quality companies should do incredibly well. Right now is one of those “buy low” opportunities. The timing could not be much better. It’s not often that you get a chance to buy high-quality stocks at this much of a discount.
Sven Franssen